24 (3) (b)

Whether a Suspended Director/Promoter of Corporate Debtor who is also a Resolution Applicant (a dual role) is entitled to access Resolution Plans submitted by others Resolution Applicants, as per Vijay Kumar Jain Vs. Standard Chartered Bank judgment – Prasada Raju M.R.V Vs. Sri. Vamsi Kambhammettu, RP of Mantena Laboratories Ltd. – NCLT Hyderabad Bench

In this important judgment, Hon’ble NCLT Hyderabad Bench holds that:

(i) A Resolution Applicant can attend CoC meeting only in respect of the plan that was submitted by him, and will have no access to the Resolution Plans submitted by others.
(ii) The cited caselaw of Vijay Kumar Jain Vs. Standard Chartered Bank (2019) ibclaw.in 24 SC also does not support the Applicant’s argument.
(iii) In the present case, not only the Applicant is related to the CD, being a promoter/director, he is also a Resolution Applicant. The CD being the MSME, he was permitted to submit a Resolution Plan. However, he was rightly kept out by the CoC from the proceedings of examination and evaluation of the Resolution Plans submitted by other Resolution Applicants.
(iv) The ‘conflict of interest’ for the Applicant, who was part of the CoC in the dual capacity did not end with him being rejected as Resolution Applicant. His capacity to be an impartial observer of the CoC’s deliberations was compromised and his views on the Resolution Plan submitted by any other Resolution Applicant would necessarily have a potential of bias even after he was out of the race.

Whether a Suspended Director/Promoter of Corporate Debtor who is also a Resolution Applicant (a dual role) is entitled to access Resolution Plans submitted by others Resolution Applicants, as per Vijay Kumar Jain Vs. Standard Chartered Bank judgment – Prasada Raju M.R.V Vs. Sri. Vamsi Kambhammettu, RP of Mantena Laboratories Ltd. – NCLT Hyderabad Bench Read Post »

Resolution Professional shall give notice of each meeting of CoC as per CIRP Regulation 19(2) even in case of adjournment of meeting where agenda modified | Reasons should be recorded in writing in case any reduction of notice time limit – Mr. Farooq Ali Khan v. Punjab National Bank – Karnataka High Court

In this case, on 11-02-2020 at 12.20 pm an e-mail is sent communicating that the second meeting of 19th CoC which was sought to be adjourned on 10-02-2020 is scheduled on the same day i.e., 11-02-2020 at 3.00 p.m.

Hon’ble High Court held that:
(i) Section 24(3) mandates that the Resolution professional shall give notice of each meeting of the CoC. The section does not depict the manner in which notice should be given. It only indicates that notice shall be given of each meeting to the CoC. In the considered view of this Court, ‘each’ would mean each and every.
(ii) The time limit for issuance of notice of meeting was reducible to 24 hours. This should be in the considered view of the Court, for reasons to be recorded in writing, as the words used are ‘as it deems fit’.
(iii) This Court, in exercise of its jurisdiction under Article 226 of the Constitution of India would not enter into venturing a fact finding enquiry to examine whether the resolution professional has acted in accordance with the duties and responsibilities under the Act.
(iv) Reserve liberty to the petitioner to submit a representation/complaint before the Board within a fortnight from the date of receipt of the copy of this order and if such a complaint is received, the Board would decide the issue, in accordance with law.
(v) The CoC shall reconsider the restructuring proposal submitted on behalf of the petitioner in terms of Section 12A of the Code.

Resolution Professional shall give notice of each meeting of CoC as per CIRP Regulation 19(2) even in case of adjournment of meeting where agenda modified | Reasons should be recorded in writing in case any reduction of notice time limit – Mr. Farooq Ali Khan v. Punjab National Bank – Karnataka High Court Read Post »

Can a single person CoC approve Resolution Plan? – Jaykay Enterprises Ltd. Vs. National Oil Company Ltd. – NCLT Kolkata Bench

In this important judgment, NCLT Kolkata Bench held that:

(i) The right regarding the land has not been defined, and it is not under our jurisdiction to decide upon the matter.
(ii) The Resolution Professional is in no fault at not providing the information provided in the Information Memorandum to the application as the Applicant is not a member of the Committee of Creditors or a prospective Resolution Applicant, hence it is not entitled to the Information Memorandum.
(iii) The word “Committee” has not been defined in the Part 1 or Part 2 of the Code which deals with Insolvency Resolution and Liquidation for Corporate Persons.
(iv) There can be no meeting when a single person represents CoC (since other persons who attended are only invitees in this case and they don’t form part of CoC) and consequently, “meeting” cannot been held as contemplated under Section 24 of the Code.
(v) There can be no two view that stake holders in a CIRP process is not restricted only to financial and operational creditors.
(vi) A decision to approve the resolution plan by the CoC should be in a validly convened and conducted CoC meeting.
(vii) The resolution plan is sent back to the CoC.
(viii) Once the Resolution Plan is approved by the Adjudicating Authority, then it will no more be a confidential document.
(ix) The Workers’ Union have no locus standi to question the assignment of a debt by Bank.

Can a single person CoC approve Resolution Plan? – Jaykay Enterprises Ltd. Vs. National Oil Company Ltd. – NCLT Kolkata Bench Read Post »

IBC does not envisage any intervention by Adjudicating Authority in day-to-day running of business operations of Corporate Debtor – M/s International Fresh Farm Products India Ltd. Vs. Mr. Sumat Kumar Gupta, RP – NCLT Chandigarh Bench

The Adjudicating Authority held that the issues that are being agitated by the suspended director which relate to the business operations of the corporate debtor, should have been raised first in the Coc meetings. Nothing in this regard has been stated by either parties during the proceedings. The Code mandates the CoC to take the decision with regard to the running of the business of the corporate debtor as per its commercial wisdom with the object to maximise the value of the corporate debtor. The Code does not envisage any intervention by this Adjudicating Authority in the commercial decisions and day-to-day running of the corporate debtor.

IBC does not envisage any intervention by Adjudicating Authority in day-to-day running of business operations of Corporate Debtor – M/s International Fresh Farm Products India Ltd. Vs. Mr. Sumat Kumar Gupta, RP – NCLT Chandigarh Bench Read Post »

Copy of Valuation Report must be supplied to ex- management/Suspended Directors – Hemant Shantilal Shah s Anr. Vs. Care Office Ltd. through RP Vikash Jain & Ors. – NCLT Ahmedabad Bench

The Adjudicating Authority held that resolution plan is a highly confidential document but when such document is required to given to the most affected parties being erstwhile members of the Board of Directors of the debtor, then the valuation report in our view which is an important document having bearing onto the fate of corporate debtor must be supplied to ex- management. The ex-management is the appropriate concerned parties to comment on valuation of properties of corporate debtor. Resolution Professional shall provide a copy of the valuation report to the suspended management of the corporate debtor subject to an undertaking from members of the suspended management, to maintain confidentiality.

Copy of Valuation Report must be supplied to ex- management/Suspended Directors – Hemant Shantilal Shah s Anr. Vs. Care Office Ltd. through RP Vikash Jain & Ors. – NCLT Ahmedabad Bench Read Post »

Is there a difference between the Supersession of Directors under the RBI Act and the Suspension of Directors under the Code? and Whether a Superseded director, who had vacated office on supersession of Board under RBI Act, is entitled to the notice of CoC meeting and has the right to participate in the meeting of the CoC? – Dheeraj Wadhawan Vs. The Administrator Dewan Housing Finance Corporation Ltd. – NCLAT New Delhi

NCLAT holds that Superseded Directors are those Directors who have been removed or deemed to have demitted office and who are not holding the position of Director on the CIRP commencement date, cannot be considered a Director Simpliciter to benefit from participating in the meeting of CoC.A removed Director from the Board of Directors cannot interfere in the Company’s affairs per contra a suspended Director always remains on the Board. The Appellant, erstwhile Directors, who have vacated the offices are also not entitled to share any document. However, the copy of the Resolution Plan after approval from the Adjudicating Authority cannot be treated as a confidential document. Therefore, after final approval of the Resolution Plan, its certified copy may be issued as per Rules.

Is there a difference between the Supersession of Directors under the RBI Act and the Suspension of Directors under the Code? and Whether a Superseded director, who had vacated office on supersession of Board under RBI Act, is entitled to the notice of CoC meeting and has the right to participate in the meeting of the CoC? – Dheeraj Wadhawan Vs. The Administrator Dewan Housing Finance Corporation Ltd. – NCLAT New Delhi Read Post »

The Resolution Plan even though it is not a confidential document after its approval, cannot be made available to each and to anyone who has no genuine claim or interest in the process – Association of aggrieved Workmen of Jet Airways (India) Ltd. Vs. Jet Airways (India) Ltd. – NCLAT New Delhi

NCLAT held that the provision of Section 61, sub-section (3) reaffirms our view that after approval of the Resolution Plan, Resolution Plan does not remain a confidential document, so as to deny its perusal to a claimant, who is aggrieved by the Plan and has come up on the Appeal. We, thus, are of the view that Resolution Plan after its approval by the Adjudicating Authority is no more a confidential document, so as to deny access to even a claimant. It is true that the Resolution Plan even though it is not a confidential document after its approval, cannot be made available to each and to anyone who has no genuine claim or interest in the process. On various grounds the access to Resolution Plan even if it is not a confidential document, after approval can be denied in proper and appropriate cases.

The Resolution Plan even though it is not a confidential document after its approval, cannot be made available to each and to anyone who has no genuine claim or interest in the process – Association of aggrieved Workmen of Jet Airways (India) Ltd. Vs. Jet Airways (India) Ltd. – NCLAT New Delhi Read Post »

Those who will watching the proceeding such as (suspended) Board of Directors or its Partners; Operational Creditors or its representatives and Resolution Applicant(s) are not mere spectator but may express their views to the Committee of Creditors for coming to conclusion in one or other way – Rajputana Properties Pvt. Ltd. Vs. Ultra Tech Cement Ltd. & Ors.- NCLAT New Delhi

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Those who will watching the proceeding such as (suspended) Board of Directors or its Partners; Operational Creditors or its representatives and Resolution Applicant(s) are not mere spectator but may express their views to the Committee of Creditors for coming to conclusion in one or other way – Rajputana Properties Pvt. Ltd. Vs. Ultra Tech Cement Ltd. & Ors.- NCLAT New Delhi Read Post »

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